What is this and can I exhaust out of it?

Yes it will still cause an issue. I’d be re fitting and re sealing the cap that was originally fitted also as it likely shares the same exit on the other side of that wall. If the single wall pipe is vented into the chimney stack or chamber the stack has to fill up with smoke and heat it before the needed draw is created to be able to pull the smoke and carbon monoxide out and away from the building.

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